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European Defence Ecosystem, Third Countries' Participation And Foreign Policy & Security 2019/9 June 2019 EUROPEAN DEFENCE ECOSYSTEM, THIRD COUNTRIES’ PARTICIPATION AND THE SPECIAL CASE OF TURKEY Emre Kürşat Kaya | Research Fellow, EDAM Foreign Policy & Security 2019/9 EUROPEAN DEFENCE ECOSYSTEM, THIRD COUNTRIES’ PARTICIPATION AND THE SPECIAL CASE OF TURKEY Emre Kürşat Kaya | Research Fellow, EDAM Executive Summary During the last three decades, the European The participation of the United Kingdom into defence Union acquired a vast range of exclusive and shared projects in the post-Brexit era is critical to ensure the competences. Although these competences concentrated success of these initiatives. The United Kingdom is the on economic integration, there have been significant third largest European major arms exporter. Yet, conditions transfers of sovereignty from national to supranational level should be applicable to all third countries. Any special in other policy areas. Despite these developments, further treatment offered to the UK will trigger heavy critics by other integration in the Common Security and Defence Policy has candidates. been limited. Since the initiation of the CSDP at the Franco- British Saint-Malo summit in 1998 and until the European Although Turkey’s current political relations with EU Council of 2013, it has mostly been a taboo to discuss member states and institutions have deteriorated, it keeps security and defence matters at the supranational level. strong economic ties with the Union. Notably, Turkey plays an important role both as a defence exporter and importer for CSDP has consolidated its rank as a high topic in the the EU. The EU is the second largest client of Turkey (after Brussels agenda in 2017 with the launch of the European the US) representing 25,4% of its defence and aerospace Defence Fund (EDF) and the Permanent Structured exports1. Ankara represents 3% of total EU exports of major Cooperation (PESCO). Both initiatives are unique for different arms and is a key client for member states such as Spain and reasons. The EDF is the first Commission-led defence Italy (respectively 14% and 10% of their total arms exports)2. initiative. As a treaty-based initiative, PESCO requires There are also strong ties between the Turkish defence firms participant member states to accept binding commitments. and their European counterparts. Turkish companies are part of European projects such as the Cougar MK1 and the The first two waves of PESCO projects (for a total of 34 Airbus A400M. Moreover, large European companies are projects), as well as the first EDF-funded research projects, active in the making of key Turkish defence products (i.e. have already been launched. The first concrete results from Agusta Westland – ATAK T129; MBDA & Thales – Air and both initiatives are expected in 2019. This year will also Missile Defence Systems; BAE Systems – TF-X). represent an important period during which the governance rules should be established, most notably regarding third- This paper aims to present an overview of the latest country participation. developments in the European Union’s new defence ecosystem and to analyse its meaning for potential partner Non-EU countries are waiting for the announcement of countries such as Turkey. The paper first presents the main clear conditions in order to participate in joint projects with components of the EDF and PESCO. It then examines the their European partners. This group of countries includes current state of affairs regarding the conditions for third- Turkey, Ukraine, the United States, and soon the United country participation to these initiatives. Finally, the analysis Kingdom. The conditions to participate in PESCO or EDF focus on the case of Turkey through its defence industrial projects will need to consider technical requirements and relations with the EU and its potential participation to the political sensitivities. EDF and PESCO. 1 Savunma ve Havacılık Sanayii, Performans Raporu, 2017. Accessed on: February 25, 2019. 2 SIPRI Fact Sheet, March 2018, Trends in International Arms Transfers, 2017. Accessed on: February 25, 2019. 1 Foreign Policy & Security 2019/9 Introduction Divergent defence industry policies of the EU member states of PESCO and the EDF as the United Kingdom, one of the are a handicap for the Union’s place in global competition. top three arms exporters in the EU, is set to leave the Union. Despite representing 27% of global arms export for the 2013- Furthermore, the exclusion of the United States will have 2017 period3, the misuse of resources due to the duplication negative effects on the initiatives. The US is playing a key of projects limits a greater potential for the Union and its role not only in the security but also defence industry of members on the global market4. The Permanent Structured its NATO Allies. Certainly, Brussels cannot offer a custom- Cooperation (PESCO), the European Defence Fund (EDF) made entry ticket to the UK or the US. Such a decision would and the Coordinated Annual Review on Defence (CARD) ultimately alienate other partner countries. aim to enable the EU to achieve strategic autonomy5. Ankara plays an increasingly assertive role in the global PESCO and the EDF offer concrete opportunities for greater arms trade. In the 2008-2013 period Turkey represented defence cooperation. Despite being labelled a “European 0.4% of the global arms exports. It increased its share of the Army” initiative, PESCO is first and foremost a defence total global arms exports to 0.8% (+145%) for the 2013-2017 cooperation framework. Most of the projects are about the period and became the 9th largest European major weapons co-development of a specific defence product such as the exporter7. While increasing its export numbers, Turkey Tiger Mark III Attack Helicopter or a Counter-Unmanned continues to be a significant importer of European defence Aerial System6. So far, the EDF which consist of two windows products. Ankara is a key importer for Spain and Italy (a research and a capability one), finances research (respectively 14% and 10% of their total exports)8. However, projects. The Commission opened a call for proposals to Turkey also has political differences with member states and finance capability development projects in March 2019. The longstanding tensions over Cyprus. This contrasting picture call focuses on a Eurodrone project, artificial intelligence of Turkey’s relations with EU member states must be kept in and cyber defence. mind when analysing its participation to European defence projects. The rules for third-country participation is key to the success 3 Ibid. 4 European Commission, The case for greater EU cooperation on security and defence. https://ec.europa.eu/commission/sites/beta-political/files/defending-europe-factsheet_en.pdf. Accessed on: February 25, 2019. 5 Strategic Autonomy: the ability to pursue its own interests without being constrained by other states. Sven Biscop, July 2018, Letting Europe Go Its Own Way: The Case for Strategic Autonomy, Foreign Affairs, https://www.foreignaffairs.com/articles/2018-07-06/letting-europe-go-its-own-way. Accessed on: February 25, 2019. 6 For more PESCO projects: https://www.consilium.europa.eu/media/37028/table-pesco-projects.pdf 7 SIPRI Fact Sheet, March 2018, Trends in International Arms Transfers, 2017. Accessed on: February 25, 2019. 8 Ibid. 2 Foreign Policy & Security 2019/9 EDF and PESCO: Exceptions to The Rule? Since the initiation of the CSDP at the Franco-British Saint- CSDP has consolidated its rank as a high topic in the Brussels Malo summit in 1998 and until the European Council of agenda in 2017 with the launch of the European Defence 2013, it has mostly been a taboo to discuss security and Fund (EDF) and the Permanent Structured Cooperation defence matters at the supranational level. When the topic (PESCO). Both initiatives are unique for different reasons. came on the table, it mostly resulted in empty promises and The EDF is the first Commission-led defence initiative. As a unrealistic goals. treaty-based initiative, PESCO requires participant member states to accept binding commitments. Figure 1: The European Defence Ecosystem9 Among all the recent initiatives, the European Defence covers 100% of costs of research projects in defence Fund stands out as the only institution-driven one, at the technologies in member states and associated third- contrary of the usual member states-driven initiatives in the countries. The research window is completed by a capability field of defence and security. Its launch coincided with the one, the European Defence Industrial Development PESCO ‘Sleeping Beauty’ speech of President Juncker10. Programme (EDIDP), which covers 20% of costs generated The primary aim of the EDF is to encourage member by the joint development or acquisition of defence products. states to cooperate more deeply in their defence industrial The initial budgets, until 2020, are 90 million euros for the planning and production. The Commission showcased the research window and 500 million euros for the capability need for such an initiative with the following terms: “too little one12. So far only research projects have been funded by coordination in defence planning leads to an inefficient the EDF. However, the Commission recently opened a call use of taxpayers’ money, unnecessary duplication and for proposals for financing capability projects via the EDIDP suboptimal deployability of defence forces”11. under the 2019-2020 EU budget. Although the initial 590 million euros EDF budget is a modest sum, the potential The European Defence Fund has two separate but impact of the envisaged 13 billion euros under the 2021-2027 complementary windows. An initial research window, the budget period cannot be underestimated. Preparatory Action on Defence Research (PADR), which 9 European Defence Agency, https://www.eda.europa.eu/images/default-source/projects-nre/capture.jpg, Accessed on: February 25, 2019. 10 European Commission, June 2017, Speech by President Jean-Claude Juncker at the Defence and Security Conference Prague: In defence of Europe, http://europa.eu/rapid/press-release_SPEECH-17-1581_en.htm Accessed on: February 25, 2019.
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